We wouldn't blame Sanmina Corporation (NASDAQ:SANM) shareholders if they were a little worried about the fact that Joseph Licata, the Independent Director recently netted about US$5.6m selling shares at an average price of US$211. Probably the most concerning element of the whole transaction is that the disposal amounted to 50% of their entire holding.

The Last 12 Months Of Insider Transactions At Sanmina

Notably, that recent sale by Joseph Licata is the biggest insider sale of Sanmina shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$239. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 50% of Joseph Licata's holding.

Over the last year we saw more insider selling of Sanmina shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Sanmina better if I see some big insider buys.

Insider Ownership Of Sanmina

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Sanmina insiders own about US$411m worth of shares (which is 3.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Sanmina Insiders?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Sanmina is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Sanmina.

Of course Sanmina may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.